BOSTON--(BUSINESS WIRE)--
State Street Corporation (NYSE:STT) today announced that the Federal
Reserve did not object to the Company's capital plan as part of the 2018
Comprehensive Capital Analysis and Review (CCAR) process. The capital
plan includes an increase in the common stock dividend and a new common
stock purchase program. In connection with its non-objection, the
Federal Reserve is requiring State Street to enhance the management and
analysis of counterparty exposures under stress. The Company is not
expected to resubmit its capital plan after completing these
enhancements.
Given this year’s severe stress scenario, State Street took a
conservative approach in developing its capital plan submission. The
capital plan includes an increase to the quarterly common stock dividend
to $0.47 per share, from $0.42 per share, beginning in the third quarter
of 2018. State Street’s Board of Directors will consider this increase
in common stock dividend at its regularly scheduled meeting in July
2018. Additionally, State Street’s Board has approved a new common stock
purchase program authorizing the purchase of up to $1.2 billion of its
common stock. This program was included in the capital plan submitted in
April and will be effective during the period of July 1, 2018 through
June 30, 2019.
State Street’s third quarter 2018 common stock and other stock
dividends, including the declaration, timing and amount thereof, remain
subject to consideration and approval by State Street’s Board of
Directors at the relevant times. The timing of any repurchases, type of
transaction and number of shares purchased under the newly authorized
common stock purchase program will depend upon various factors,
including alternative investment opportunities, such as merger and
acquisition activity, internal capital generation, market conditions,
State Street’s capital position, the amount of common stock issued as
part of employee compensation programs and other factors. Stock
purchases may be made using various types of transactions, including
open-market purchases, accelerated share repurchases or other
transactions off the market, and may be made under Rule 10b5-1 trading
programs. The common stock purchase program does not have specific price
targets and may be suspended at any time.
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors, including
investment servicing, investment management and investment research and
trading. With $33.3 trillion in assets under custody and administration
and $2.7 trillion* in assets under management as of March 31, 2018,
State Street operates in more than 100 geographic markets and employs
over 37,000 worldwide. For more information, visit State Street’s
website at www.statestreet.com.
* Assets under management include the assets of the SPDR® Gold ETF
and the SPDR® Long Dollar Gold Trust ETF (approximately $36 billion as
of March 31, 2018), for which State Street Global Advisors Funds
Distributors, LLC (SSGA FD) serves as marketing agent; SSGA FD and State
Street Global Advisors are affiliated.
Forward-Looking Statements
This news release contains forward-looking statements as defined by
United States securities laws, including statements relating to the
content of, and State Street’s goals and expectations regarding, its
capital plan, involving common stock dividends and purchases, and
expectations for returning capital to shareholders. Forward-looking
statements are often, but not always, identified by such forward-looking
terminology as “plan,” “propose,” “will,” “priority,” “intend,”
“expect,” “may,” “objective,” “forecast,” “outlook,” “believe,”
“anticipate,” “estimate,” “seek,” “trend,” “target,” “strategy” and
“goal,” or similar statements or variations of such terms. These
statements are not guarantees of future performance, are inherently
uncertain, are based on current assumptions that are difficult to
predict and involve a number of risks and uncertainties. Therefore,
actual outcomes and results may differ materially from what is expressed
in those statements, and those statements should not be relied upon as
representing our expectations or beliefs as of any date subsequent to
the date of this news release.
Factors that could cause changes in the expectations or assumptions on
which forward-looking statements are based cannot be foreseen with
certainty and include, but are not limited to:
-
requirements to obtain the prior approval or non-objection of the
Federal Reserve or other U.S. and non-U.S. regulators, including,
without limitation, compliance with Federal Reserve expectations
(conveyed to State Street in connection with CCAR 2018 or thereafter)
regarding enhancements to the management and analysis of counterparty
exposures under stress, for the use, allocation or distribution of the
Company’s capital or other specific capital actions or corporate
activities, including, without limitation, acquisitions, investments
in subsidiaries, dividends and stock purchases, without which State
Street’s growth plans, distributions to shareholders, share repurchase
programs or other capital or corporate initiatives may be restricted;
-
changes in State Street’s leverage or other regulatory capital ratios
resulting from increases in client deposits, interest rates or other
factors;
-
increases in the volatility of, or declines in the level of, State
Street’s net interest income, changes in the composition or valuation
of the assets recorded in the Company’s consolidated statement of
condition (and State Street’s ability to measure the fair value of
investment securities) and changes in the manner in which it funds
those assets;
-
the liquidity of the U.S. and international securities markets,
particularly the markets for fixed-income securities and inter-bank
credits; the liquidity of the assets on State Street’s balance sheet
and changes or volatility in the sources of such funding, particularly
the deposits of State Street’s clients; and demands upon our
liquidity, including the liquidity demands and requirements of State
Street’s clients;
-
the level and volatility of interest rates, the valuation of the U.S.
dollar relative to other currencies in which State Street records
revenue or accrues expenses and the performance and volatility of
securities, credit, currency and other markets in the U.S. and
internationally; and the impact of monetary and fiscal policy in the
U.S. and internationally on prevailing rates of interest and currency
exchange rates in the markets in which State Street provides services
to its clients;
-
the credit quality, credit-agency ratings and fair values of the
securities in State Street’s investment securities portfolio, a
deterioration or downgrade of which could lead to other-than-temporary
impairment of such securities and the recognition of an impairment
loss in the Company’s consolidated statement of income;
-
State Street’s ability to attract deposits and other low-cost,
short-term funding; State Street’s ability to manage the level and
pricing of such deposits and the relative portion of our deposits that
are determined to be operational under regulatory guidelines; and the
Company’s ability to deploy deposits in a profitable manner consistent
with our liquidity needs, regulatory requirements and risk profile;
-
adverse changes in the regulatory ratios that State Street is, or will
be, required to meet, whether arising under the Dodd-Frank Act or
implementation of international standards applicable to financial
institutions, such as those proposed by the Basel Committee, or due to
changes in regulatory positions, practices or regulations in
jurisdictions in which we engage in banking activities, including
changes in internal or external data, formulae, models, assumptions or
other advanced systems used in the calculation of State Street’s
capital or liquidity ratios that cause changes in those ratios as they
are measured from period to period;
-
the results of, and costs associated with, governmental or regulatory
inquiries and investigations, litigation and similar claims, disputes,
or civil or criminal proceedings;
-
the credit agency ratings of State Street’s debt and depositary
obligations and investor and client perceptions of the Company’s
financial strength; and
-
adverse publicity, whether specific to State Street or regarding other
industry participants or industry-wide factors, or other reputational
harm.
Other important factors that could cause actual results to differ
materially from those indicated by any forward-looking statements are
set forth in State Street’s 2017 Annual Report on Form 10-K and the
Company’s subsequent SEC filings. Investors are encouraged to read these
filings, particularly the sections on risk factors, for additional
information with respect to any forward-looking statements and prior to
making any investment decision. The forward-looking statements contained
in this news release should not be relied on as representing the
Company’s expectations or beliefs as of any time subsequent to the time
this news release is first issued, and State Street does not undertake
efforts to revise those forward-looking statements to reflect events
after that time.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180628006382/en/
State Street Corporation
Ilene Fiszel Bieler, +1 617-664-3477
or
Marc
Hazelton, +1 617-513-9439
Source: State Street Corporation